What is Government Grant Fraud?
- Federal grants are a critical part of the U.S. economy. Because of this, the selection, awards, and maintenance of government grants are subject to various laws and regulations to maintain the integrity of the system, prevent fraud, and prosecute individuals and entities who have engaged in grant fraud.
- The federal government gives federal grants to various universities, organizations, and research institutions for projects that will provide public services and benefit society and the public good.
- In addition to recipients trying to illegally receive government grants, there are also government grant “scammers” that deceive people into believing they have the ability to award grants but who instead are seeking to steal one’s identity and money.
- Federal grants often come accompanied by many restrictions on how the funds can be used. Failure to comply with these provisions could open the door to liability under the False Claims Act, which makes it illegal to defraud the government by giving fraudulent information or making false statements.
- Consider hiring an attorney with experience in dealing with the legal, regulatory, and compliance aspects regarding government grants.
Experienced Defense Team
If you need advice regarding charges of government grant fraud, do not hesitate to contact one of our defense attorneys.
Federal grants are an important part of the U.S. economy. The federal government spends billions more dollars on grants than it does on federal government contracting each year.
Therefore, grant recipients have become popular targets of federal investigations, enforcement actions, and prosecution proceedings. It is critical that you hire a team of defense attorneys knowledgeable in the process of a typical grant fraud proceeding and the entire investigation process.
At Oberheiden, P.C., our attorneys are skilled at offering legal representation for all types of grant fraud and are well versed in the complexities of the False Claims Act. We regularly counsel our clients in carrying out corrective action, internal audits, and other inquiries from federal authorities.
Most importantly, we advise our clients on the best course of action for their particular case, whether civil or criminal and regardless of the charges alleged. We fight for out clients with the utmost dedication, compassion, and perseverance.
Do not wait to get in touch with a qualified attorney today. Put Oberheiden, P.C. on your side to advise you on these legal issues and next steps regarding federal grant fraud.
Definition of Federal Grants
Federal grants are a means by which the government gives money to projects that will develop and provide public services that will benefit society and the public good.
Many non-profit organizations, universities, research institutions, and even some for-profit organizations depend on government grants to help achieve their mission.
Government grants and the fraud of such grants are governed by many laws and regulations, as we will briefly explore in the next few sections.
Definition of Federal Grant Fraud
Federal grant fraud refers to the act of making false statements, providing false or fictitious documents, or omitting material facts in statements or documents. This type of fraud can occur at many stages in the grant process such as within the grant applications or when the person or entity is carrying out the work that the government grant is funding.
A typical scenario of government grant fraud occurs when the grant recipient tries to defraud the government about their status and eligibility to receive award money.
Government Grant “Scammers”
In addition to recipients trying to illegally receive government grants, there is also the possibility of government grant “scammers.”
These “scammers” begin by deceiving people by stating that they have the ability to award money. The scammers then try to get people’s money by guaranteeing those people a grant. This grant could be for many purposes such as for a home improvement project or even a grant for college.
The scammer proceeds by asking the person for their bank information and promising that they will deposit the grant money in your account or withdraw a fee for the grant. However, what actually happens is that the scammer steals the person’s identity and/or that person’s money.
Federal authorities routinely warn individuals and businesses about the risk of government grant scammers. For instance, it notes that government grants are rarely awarded to individuals and are generally given to organizations, universities, or governments for projects relating to the public good or for research.
Despite this, fraud regarding federal grants has not abated and is increasingly investigated by many federal authorities.
If you have been charged with such an offense, it is important that you understand everything about the government’s investigative process, defense strategies, and negotiation tactics to settle or dismiss the charges. The attorneys at Oberheiden, P.C. can help you here.
Federal Response to Government Grant Fraud
The Department and Justice, the Federal Bureau of Investigation, the Federal Inspectors General within many government agencies, and the Financial Fraud Enforcement Task Force are charged with the responsibility to combat fraud and deceit regarding federal grants.
Potential consequences for an entity or individual found to have engaged in federal grant fraud include administrative remedies, civil penalties, debarment, and criminal prosecution.
Additionally, the grants awarded often come with stipulations or restrictions on how the money can be used. If the funds are misused—not used properly under the provisions of the grant award—the entity could be liable under the False Claims Act.
Liability under the False Claims Act
The False Claims Act Generally
The False Claims Act (31 U.S.C. §§ 3729 – 3733) makes it illegal to perpetrate a fraud against the government by providing fraudulent information or making false statements. This Act is a powerful legislative tool that is used to fight fraud against the government.
It makes an individual liable for knowingly presenting any false claims for payment or approval. Federal grant fraud is a violation of the False Claims Act.
Either the U.S. attorney generals or private citizens can bring a case for government grant fraud. When a private citizen initiates the suit, it is called a Qui Tam lawsuit.
Qui Tam Lawsuits
There is also a provision within the False Claims Act that allows for Qui Tam lawsuits to be filed. A Qui Tam lawsuit is a lawsuit that can be brought by anyone, including individuals who have no connection to the government.
The only requirement that such individuals need is some information regarding fraudulent or false claims. These lawsuits are typically initiated by individuals who work for companies organizations that are defrauding the government.
An individual coming forward with such information in a Qui Tam lawsuit are whistleblowers. These whistleblowers, as a reward for divulging this information, are allowed to keep some of the money that the government eventually recovers from the fraudster. They are also protected from employer retaliation, meaning that they cannot be fired as a result of conveying this information.
The rewards can sometimes peak up to millions of dollars, therefore making this provision in the False Claims Act a significant incentive for whistleblowers to report fraud.
Having said that, there is great potential for some of these claims that are brought forward to be false or based on incomplete information. This is why it is so important to hire an attorney who has experience in this area.
Examples of Government Grant Fraud
There are numerous examples of government grant fraud. Below we are offer some instances:
- using federal grant money to purchase items that were not provided for by the terms of the grant (non-grant purposes)
- making false statements or giving false documents for one’s grant application in order to qualify for or receive the grant money
- falsifying the results or research of scientific studies to receive or continue receiving government grants
- falsifying progress reports in connection to the grant
- mispresenting the progress or status of a federally funded project to receive or continue receiving government grants
- billing more than one grant for identical work performed or billing for expenses that have yet to be performed as a part of the terms of the grant
- substituting results or materials for different ones to meet grant criteria
- failing to comply with government safety requirements
- failing to comply with accounting or recordkeeping requirements
- influencing or bribing a federal government official to award a particular grant to their friend or family member
- maintaining and concealing an impermissible conflict of interest in connection with any federal grant application
- charging higher rates than those mandated or provided for by the terms of the grant for the particular project
The above list is only representative of the different ways by which an individual or entity can be found to have engaged in government grant fraud.
All parties who are involved in the grant fraud can potentially be charged with government grant fraud.
Need Advice Regarding Government Grant Fraud?
If you need advice regarding government grant fraud charges, you need the advice of a skilled attorney.
Government grant fraud can present a host of problems for your organization and result in needless time and expense as well as the loss of reputation. If you are charged under the False Claims Act, you could face jail time and significant civil and criminal penalties.
The process of awarding, distributing, and complying with government grants is a complicated one. We understand this and are here to help.
The attorneys at Oberheiden, P.C have experience advising clients on issues regarding federal and state grants and advising grant recipients on complying with their current and future obligations under the grant as well as responding to civil and criminal charges.
Do not wait for a protracted litigation to begin. There are sometimes actions we can take to mitigate or eliminate certain steps in the investigation process. If this stage has already passed, our attorneys are highly skilled at defending our clients in court and settling the matter on terms most favorable for our clients.
Call us today or contact our office for a free consultation to help resolve these legal challenges and fight for your freedom.
Dr. Nick Oberheiden, founder of Oberheiden P.C., focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation.